According to an Investment News survey, the typical advisory firm spends no more than about 2% of its revenues on marketing.
And it makes sense: Many financial advisors are skeptical that marketing even “works,” and they don’t have much free cash flow to spend on marketing in the first place. So instead, most advisors simply focus on “networking” and other referral-based activities.
But when you break it down, these time-consuming networking events to acquire clients are often more costly than having a dedicated marketing budget for your firm.
Let’s say a financial advisor bills $150 per hour for their time. To acquire clients, they spend:
That’s 36 hours x $150/hour = $5,400 + $500 = $5,900
- $500 in attendance fees for networking events
- 2 hours going to networking meetings
- 8 hours of follow-up lunch meetings to get referrals
- 4 hours meeting with potential prospects who are referred
- 22 hours in preparation work
...All to get just one client.
This illustrates how investing in marketing for client acquisition may be more cost-effective. But this brings us to our next problem: Many of the advisors who do invest in marketing are focusing on the wrong things — things that cause them to waste precious marketing dollars and bring in a low ROI.
So, what are the lowest-ROI marketing tactics advisors are taking on today? Behold, the top four:
1. Print Advertising
We’re talking about that quarter- or half-page advertisement that is placed mid-way through your local community association’s monthly periodical — yes, you know the one. Unfortunately, this may be the worst bang for your marketing buck.
Print advertising rates are still inflated from mid-2000s highs with exaggerated readership numbers that are based on very-unlikely estimates — like the person who receives the periodical in the mail and shares it with three or four of their friends, or the copy that sits in the lobby of your doctor’s office for months on end. Recently, we’ve seen quotes for half-page ads between $2,200–$3,400 and half-page ads up to $5,000 in local, lifestyle magazines.
Unlike digital advertising, print ads provide very little transparency into conversion rates because it’s difficult to know the accurate reach and physical action a reader takes after they see the ad. Contrast this lack of transparency with digital advertising (both search and social), which allows you to get in front of a qualified person and send them to your website for (sometimes) less than $10 a click.
If you are committed to going down the print advertising route, it’s important to make sure you are optimizing your efforts where you can by:
2. Unoriginal (or Just-Plain Bad) Templated Content
- Ensuring your ad is placed near relevant editorial content in the magazine or newspaper.
- Adding a URL to a customized landing page (not the homepage of your website), consistent with the ad’s message that includes a form or other information-capture tool.
- Including multiple forms of contact information on your ad, such as your phone number, email address, or a QR code.
- Opting for editorial placements, such as advertorials or sponsored content.
Content is crucial to any digital marketing strategy. By some estimates, it comprises more than 30% of the average marketing budget. Content marketing is used for lead generation, lead nurturing, SEO, client retention, and referrals, but — as much of a driving force it can be for good — it can also turn people away, if it isn’t approached correctly. This is especially true for content that is consistently promotional or salesy. People are looking for answers to their financial problems, and that 300-word, generic blog post about the “premier, leading expertise of XYZ firm” is doing advisors no favors.
Along the same lines, your content marketing spend is wasted when it’s not targeted to the market you serve, without real client niches and segments represented in the copy. Templated content can be cost-effective, but it misses the mark here. You should be using your content as an opportunity to tell your brand’s story and show your expertise by addressing your client types head-on.
For instance, instead of titling your blog post, “2019 Year-End Planning Tips,” you can use a more targeted headline like “How Small Business Owners Can Address Personal Financial Planning Needs for 2020.” Your extra efforts will be rewarded in search engine results, in recognition from COIs and influencers looking for accessory content when serving similar clientele, and from your clients, to whom you can demonstrate your expertise on an ongoing basis.
If you still prefer to use templated content, make sure you are optimizing your efforts where you can by:
- Changing the headlines, at the very least. Duplicate content hurts your domain in Google’s eyes and makes it less likely for your content to surface. Try flexing your creative, copywriter muscles and brainstorm headlines that readers are likely to click. Lists (like “The Top 5 Ways to...”),” how-to’s, and guides tend to work well in articles and as titles.
- Taking a few minutes and adding a sentence or two to the introduction of your article that plays to a client niche you serve. Rephrase sentences throughout the article, using terms that are conducive to your brand voice. Even minor revisions can go a long way toward transforming your templated content into something unique.
- Adding call-to-action statements that are custom to your company.
3. Staying Silent on Social Media and Placing Too Much Emphasis on Vanity Metrics
What are “vanity metrics,” you ask? These are the number of likes your posts get on social media and the number of people who follow your page. It’s tempting to fall into the habit of craving likes and follows. But you should focus on engagement instead — that includes clicks and shares, as well as client follower rate and growth.
At the same time, it’s better not to be on a platform at all than to be on there with no activity and no plan of action or strategy. Take Instagram, for instance, which has been the fastest-growing channel for business use in the past year. Plenty of businesses are flocking to Instagram, which may inspire you to do the same. But unless you have graphic resources available, a predilection for video, or an effective ad budget, you’re not likely to see any real results.
In our research, we’ve seen that 60%-90% of all demographics (ages 18-29, 30-44, 45-60, and >60) expect firms to have a presence on Facebook. In addition, prospects see public LinkedIn profiles for advisors as a key channel in the qualification and consideration stages of the funnel. Start by building a presence on Facebook and LinkedIn first, and then go from there.
If you still have trouble ignoring vanity metrics or want to be on a channel that you may not have a strategy for, you can optimize your activity by:
- Being consistent in how often you post and in your brand voice and messaging.
- Considering paid “boosting” methods to quickly grow your audience in a targeted way — geographically or demographically.
4. Overlooking the Importance of Email Marketing
There’s no question that social media has changed at a lightning pace over the past decade. Consider that on Twitter, the lifespan of a typical, individual tweet is 18 minutes. Consider that reach on Facebook for Business has dropped from 16% in 2012 to less than 3% as of 2017.
All of the prominent social media platforms have shifted into monetization, which means the free ride on the newsfeed is long over. Twitter has moved to an algorithmic feed. LinkedIn has reduced the capabilities of its organic search tools in turn. Social media sites are elevating posts from friends and family to keep users on the site, while organic reach for businesses is dwindling. If you don’t intend on advertising on these channels, then you should be prioritizing your email lists.
The data tells us that email marketing is outperforming social media. Compare the statistics we shared above with the fact that the average email open rate for all industries is more than 20%. What’s more, 64% of companies rate email as their most effective marketing channel. The average click-through rate for email is 3.57% across industries, while click-through rates for shared links on Facebook lag at 0.07%; Twitter stands even lower at 0.03%.
It’s easy to see why email marketing is so successful. It allows you to share content that helps retain and re-engage clients. It allows you to nurture prospects through the funnel with drip campaigns. And importantly, it allows you to provide expertise, thought leadership, and education in a convenient, instantaneous way.
As you build your email marketing program, keep these best practices in mind:
- Be Consistent. The only way you’ll improve your open and click-through rates and reap success is by sticking to a consistent, predictable schedule. Make sure your clients and prospects know when they can expect an email from you, and what value they can expect out of it.
- Embrace Segmentation. Not every email will be relevant to every client on your list. Segment your lists by demographic, need, or service to allow for more targeted content distribution. You’ll capture a stronger, more engaged audience if you share topics with the people who care about them most.
- Use Call-to-Action Statements. Your emails should always inspire your clients and prospects to take action. Asking openers to click-through to learn more about a specific topic or share content with others in their network keeps your firm top-of-mind even after they’ve finished reading your email.
- Leverage Data. Get into the habit of reviewing and analyzing your email analytics — including important metrics like click-through rate, open rate, and unsubscribes — to make better decisions going forward. Focus on growing client engagement and keep an eye on what content resonates with your audience.
Have you or your firm tried something that we missed above? Let us know! And if you’re interested in improving your firm’s marketing strategy, reply to this email or reach out to us today by clicking the button below.